July 2, 2024

The Month My Budget Exploded (and How I Clawed My Way Back)

Budgets are a smart way to effectively track your income and expenditure and better manage your money. Through a budget, you can monitor your spending and ensure you are making wise monetary decisions.

I’ve always read that having a budget helps you stay on track and for the most part it did. However, what do you do when your budget explodes?

Do you buckle under the pressure? Do you consider borrowing from family or taking out loans for employees? Or do you just resign yourself to a state of financial woe?

While I can’t speak for anyone else, I can share my experience of the time I went through such a situation and how I clawed my way back to financial stability.

Let’s dive into my story!

Brown wallet spilling out coins The Month my budget exploded

When My Budget Went Boom

When you hear about a budget “exploding”, you’d think it was a sudden thing, something that no one saw coming. However, in retrospect, there were many signs, I just chose to ignore or dismiss them.

I work a minimum wage job and each day is more or less the same with maybe an interesting happening here or there. I wake up, I go to work, I clock out, I go to sleep and do it all over again the next day. I’ve never had an exciting work life, but at it least it was consistent.

When it came to my finances, I tried to stay on top of things. In the last week of every month, I’d sit down and create a budget for the following month and try my best to stick to it. Granted, I almost always ended up exceeding my monthly budget, but it was by small measures. Surely, nothing to be overly concerned about. This was the first sign that I missed.

With every month, I soon found it more and more difficult to pay off essentials such as utility bills and even the rent for my one bedroom apartment. Things only further escalated when I received emails and letters from my bank informing me that I hadn’t paid off my credit card balance for the month.

Knowing that I had forgotten such a crucial payment was bad enough, but it was only worsened by the fact that I simply couldn’t afford to pay it.

Looking for Answers

I wouldn’t say that I’m an extremely put-together person when it comes to managing my finances. However, I do try my best to stay on top of things.

Upon realising that my budget had completely exploded out of control, I decided to sit down one weekend and work out exactly when and where things started to go wrong.

During this search, I soon found out that I had a lot of unnecessary expenses that gradually grew larger and larger over time. From subscriptions to services and platforms I didn’t even use anymore to ordering take out and dining out instead of making meals for myself, my spending was unknowingly spiralling out of control.

The only reason my credit card bill had slipped through the cracks was because I was completely overwhelmed at the time worrying about how I could pay off my utility bills. Almost every financial issue I had faced was interconnected and it could all be traced back to my budget that I had failed to commit to.

This was when I decided that I couldn’t let this downward spiral continue. It was time to get my financial situation under control and get back on top of things.

How I Got My Finances Back on Track

1) Prioritising My Debts

The first thing I did was list down all the debts I had acquired in order of urgency, with those I needed to pay off as soon as possible on the top.

Fortunately, I was able to access a short-term loan for employees and use the funds to pay off my credit card debt and overdue utility bills and rent. Personally, I feel that prioritising my debts really helped put my finances into perspective and get a better understanding of my situation.

2) Being Realistic When Budgeting

While my budget ‘exploding’ may have been one of the worst things that could’ve happened to me at the time, budgeting itself was still quite helpful.

However, this time around, I decided to be more realistic when creating my budget. I planned my budget to precisely account for essential expenses, loan repayments and how to make my income last throughout the entire month.

By making my budget more realistic, I found that it was much easier to stick to and I didn’t come up short of any of my projections.

3) Cutting Unnecessary Costs

This step definitely made the biggest difference. I did away with my unused subscriptions and cut down on my outside food and entertainment options and found my finances thanking me for it.

4) Starting an Emergency Fund

In another step towards planning for my financial future, I began to save and set aside a small amount of my income every month to set up an emergency fund.

Within six months, I soon had a small financial safety net for myself to fall back on if any emergency were to occur.

These few months were an extremely challenging period of my life, but after giving it my all, I was gradually able to claw my way back into financial stability.

To Wrap Up

My takeaway from this experience would be that making a budget isn’t all it takes to effectively manage your finances. It is equally important to do it realistically and actually stick to it if you want to see results.

At times, it is very easy to lose track of what you set out to do, but you need to commit to your goals if you want to turn them into a reality.

While I did not enjoy this stage of my life, it certainly broadened my view of financial planning and how important it is when it comes to controlling one’s finances.

The road to financial stability may not be an easy path, but as long as you put in the effort, you too can work towards a successful financial future.

Thanks for reading xxx

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About

Hi and welcome to The Willow Tree. I’m Michelle, also known as Shel and I am a mama to three beautiful crazy kids – I have two handsome boys and a wild and wonderful girl.

I really wanted a concrete place to share my love for travel, in particular Disney and offer my readers a chance to gain some knowledge around what we love to do as a family of 5.

I share our family adventures which include days out, travel advice and tips, holiday reviews, restaurant visits and of course, our love for Disney, including Disneyland Paris and Walt Disney World.

Life is about creating memories, and here we are sharing them with you

xoxo

 

 

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